2015/07/20/(Mon)

Prologis Completes $5.9 Billion KTR Acquisition [Real Estate]

Prologis, Inc. announced it has completed its acquisition of the real estate assets and operating platform of KTR Capital Partners (KTR) and its affiliates for a total purchase price of $5.9 billion, on June 1, 2015.

The properties were acquired by Prologis U.S. Logistics Venture (USLV), a 55-45 consolidated joint venture with Norges Bank Investment Management (NBIM), manager of the Norwegian Government Pension Fund Global. The real estate assets include an approximately 60 million square foot operating portfolio, 3.6 million square feet of development-in-progress and a land bank with a build-out potential of 6.7 million square feet.

"We're interested in acquiring assets in the U.S. only when we see a close alignment with our own holdings," said Hamid Moghadam, chairman and CEO, Prologis. "We bring a significant competitive advantage to the table with the attractiveness of our currency through our OP unit structure, and our ability to execute reliably and expeditiously gives us an important edge."

Moghadam added, "The transaction is immediately accretive and will also deliver long-term value to our shareholders through incremental NOI from the lease-up of the operating and development portfolios."

Prologis' share of the completed acquisition was valued at approximately $3.2 billion, consisting of the assumption of approximately $400 million in secured mortgage debt, the issuance of $202 million in common limited partnership units in Prologis, L.P. and $2.6 billion in cash. The cash portion was funded through the company's previously announced financing transactions, with the remainder from its global line of credit and the monetization of hedges.

Prologis expects to repay its two-year term loan and line of credit through the combination of asset and joint venture sales. The two-year term loan replaced the commitments to fund the previously announced bridge loan.

The transaction is expected to be accretive to 2015 core funds from operations (Core FFO) by approximately $0.09 per share. As a result, Prologis increased its full-year 2015 Core FFO guidance range to $2.16 to $2.22 per diluted share from $2.07 to $2.13 per diluted share. This represents year-over-year growth of more than 16 percent at the midpoint. On an annual stabilized basis, the forecasted Core FFO accretion is expected to be approximately $0.15 per share. Additionally, the transaction is expected to reduce general and administrative expenses as a percentage of assets under management by approximately 10 percent and increase U.S. dollar equity exposure to 95 percent.

"We have worked extremely hard to position our balance sheet for opportunities such as this," said Tom Olinger, chief financial officer, Prologis. "Looking forward, we can fund our future deployment activity through capital recycling. We believe this ability to self-fund, in combination with the organic earnings growth from same-store NOI and development stabilizations, will reduce debt-to-EBITDA by roughly half of a turn on an annual basis."

- See more at: http://otp.investis.com/clients/us/prologis/usn/usnews-story.aspx?cid=848&newsid=29533#sthash.fBsivR3J.dpuf

2015/06/03/(Wed)

Prologis Completes $5.9 Billion KTR Acquisition [Real Estate]

Prologis, Inc. (NYSE: PLD), the global leader in industrial real estate, today announced it has completed its acquisition of the real estate assets and operating platform of KTR Capital Partners (KTR) and its affiliates for a total purchase price of $5.9 billion.

The properties were acquired by Prologis U.S. Logistics Venture (USLV), a 55-45 consolidated joint venture with Norges Bank Investment Management (NBIM), manager of the Norwegian Government Pension Fund Global. The real estate assets include an approximately 60 million square foot operating portfolio, 3.6 million square feet of development-in-progress and a land bank with a build-out potential of 6.7 million square feet.

"We're interested in acquiring assets in the U.S. only when we see a close alignment with our own holdings," said Hamid Moghadam, chairman and CEO, Prologis. "We bring a significant competitive advantage to the table with the attractiveness of our currency through our OP unit structure, and our ability to execute reliably and expeditiously gives us an important edge."

Moghadam added, "The transaction is immediately accretive and will also deliver long-term value to our shareholders through incremental NOI from the lease-up of the operating and development portfolios."

Prologis' share of the completed acquisition was valued at approximately $3.2 billion, consisting of the assumption of approximately $400 million in secured mortgage debt, the issuance of $202 million in common limited partnership units in Prologis, L.P. and $2.6 billion in cash. The cash portion was funded through the company's previously announced financing transactions, with the remainder from its global line of credit and the monetization of hedges.

Prologis expects to repay its two-year term loan and line of credit through the combination of asset and joint venture sales. The two-year term loan replaced the commitments to fund the previously announced bridge loan.

The transaction is expected to be accretive to 2015 core funds from operations (Core FFO) by approximately $0.09 per share. As a result, Prologis increased its full-year 2015 Core FFO guidance range to $2.16 to $2.22 per diluted share from $2.07 to $2.13 per diluted share. This represents year-over-year growth of more than 16 percent at the midpoint. On an annual stabilized basis, the forecasted Core FFO accretion is expected to be approximately $0.15 per share. Additionally, the transaction is expected to reduce general and administrative expenses as a percentage of assets under management by approximately 10 percent and increase U.S. dollar equity exposure to 95 percent.

"We have worked extremely hard to position our balance sheet for opportunities such as this," said Tom Olinger, chief financial officer, Prologis. "Looking forward, we can fund our future deployment activity through capital recycling. We believe this ability to self-fund, in combination with the organic earnings growth from same-store NOI and development stabilizations, will reduce debt-to-EBITDA by roughly half of a turn on an annual basis."

- See more at: http://otp.investis.com/clients/us/prologis/usn/usnews-story.aspx?cid=848&newsid=29533#sthash.FiUn9WwG.dpuf

2014/10/24/(Fri)

Prologis Announces Third Quarter 2014 Earnings Results [Real Estate]

Prologis, Inc. reported results for third quarter 2014. Core funds from operations (Core FFO) per fully diluted share was $0.48 for the third quarter compared with $0.41 for the same period in 2013, a year-over-year increase of 18 percent.

"I am very pleased with our quarterly performance," said Hamid R. Moghadam, chairman and CEO, Prologis. "Our results were led by operations, with global occupancy ending at 95 percent and rent change reaching the highest level in many years. We are raising the midpoint for our full-year 2014 Core FFO guidance due to our performance to date and expectations for continued growth."

OPERATING RESULTS STRENGTHEN ACROSS THE GLOBEPrologis ended the quarter with 95.0 percent occupancy in its operating portfolio, an increase of 110 basis points over the same period in 2013 and 40 basis points over the prior quarter. The quarterly increase was driven by a 110 basis point increase in spaces under 100,000 square feet and a 90 basis point increase in the company's European portfolio.

In the third quarter, the company leased 40.8 million square feet (3.8 million square meters) in its combined operating and development portfolios. Tenant retention was 83.9 percent.

GAAP rental rates on signed leases during the quarter increased 9.7 percent from prior rents, led by the U.S. at 15.5 percent and followed by Asia at 10.2 percent and Europe at 0.2 percent.

During the third quarter, same store NOI increased 3.7 percent on a GAAP basis and 4.0 percent on an adjusted cash basis.

CAPITAL DEPLOYMENT ACTIVITY CAPTURES DEMAND FOR CLASS-A PRODUCTNew investments totaled $1.9 billion ($1.3 billion Prologis' share) in the third quarter, as the company continued to deploy capital at attractive yields.

Development Starts & StabilizationsDuring the quarter, Prologis started $697.5 million ($615.6 million Prologis' share) of new developments, with an estimated weighted average yield upon stabilization of 7.1 percent and an estimated development margin of 19.1 percent.

The company stabilized $222.7 million ($219.4 million Prologis' share) in development projects, principally in the U.S. and Mexico, with an estimated development margin of 25.7 percent, generating $56.9 million (Prologis' share) of estimated value creation.

"Margins remain above average and we are poised to create value for years to come," said Mike Curless, chief investment officer, Prologis. "Our land bank is well-positioned for the next generation of development activity. Approximately 90 percent is located in major metropolitan areas, where we see accelerating demand."

At quarter end, the book value of the company's land bank totaled $1.8 billion with an estimated build-out potential of $10.8 billion.

AcquisitionsPrologis acquired $883.8 million ($367.4 million Prologis' share) of buildings, principally in Europe through its co-investment ventures. The stabilized capitalization rate on Prologis' share of building acquisitions was 6.1 percent.

The company invested $357.5 million in its North American Industrial Fund, increasing Prologis' ownership interest to 63.3 percent.

Contributions & DispositionsPrologis completed $442.6 million ($376.2 million Prologis' share) of contributions to Nippon Prologis REIT and third-party dispositions of non-strategic assets of $398.0 million ($390.3 million Prologis' share). Prologis' share of contributions and building dispositions had a stabilized capitalization rate of 6.0 percent.

As previously announced and subsequent to quarter end, the company completed a €600 million bond offering at an annual coupon rate of 1.375 percent with a 2020 maturity. Prologis has limited debt maturities until 2017.

NET EARNINGSNet earnings per fully diluted share was $0.23 for the third quarter compared with a net loss per share of $0.02 for the same period in 2013.

GUIDANCE MIDPOINT INCREASED FOR 2014Prologis increased the midpoint of its full-year 2014 Core FFO guidance, narrowing the range to $1.85 to $1.86 per diluted share from $1.82 to $1.86 per diluted share. The company expects to recognize net earnings, for GAAP purposes, of $0.49 to $0.50 per share.

The difference between the company's Core FFO and net earnings guidance for 2014 predominantly relates to real estate depreciation and recognized gains or losses on real estate transactions and early extinguishment of debt.

WEBCAST & CONFERENCE CALL INFORMATIONPrologis will host a live webcast/conference call to discuss quarterly results, current market conditions and future outlook today, Oct. 23, at 12 p.m. U.S. Eastern Time. Interested parties are encouraged to access the webcast by clicking the microphone icon located near the top of the opening page of the Prologis Investor Relations website (http://ir.prologis.com). Interested parties also can participate via conference call by dialing +1 877-256-7020 (toll-free from the U.S. and Canada) or +1 973-409-9692 (from all other countries) and entering conference code 48765485.

A telephonic replay will be available Oct. 23-Nov. 23 at +1 855-859-2056 (from the U.S. and Canada) or +1 404-537-3406 (from all other countries); please use conference code 48765485. The webcast replay will be posted when available in the "Events & Presentations" section of Investor Relations on the Prologis website.